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Accounting for accruals and prepayments

Example 2

A business entity commenced trading on 1 March and pays rent quarterly in
advance on 1 March, 1 June, 1 September and 1 December. The annual
rental is $4,800.

$
1 Mar 1,200
1 Jun 1,200
1 Sep 1,200
1 Dec 1,500

The annual rental was increased to $6,000 per annum with effect from 1
December 20X1. The accounting year end is 31 December.

Required:

Prepare the rent expense account for the accounting period ended 31
December 20X1.

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